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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4479
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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Madam,When i have retained money from the job

Customer Question

Dear Sir/Madam,
When i have retained money from the job i work for, what is good ways of making your money grow besides putting it into a savings account? The savings rates are so low it is very disappointing. Should i invest in the stock market? Are there other investments that i can look at with my money, i want to avoid savings accounts if possible the rates are too low?
Yours faithfully,
John Fellows
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Mr. Fellows,

Hello and welcome. Thank you for providing an opportunity to assist you.

Yes, I fully agree with you. Interest rates are so low that it literally gets disappointing investing in savings account.

However, I believe, you need to balance risk and reward. Just because interest rates are so low, I would not advice you to invest directly in money market instruments or stock markets. The risk-benefit ratio will never work out.

Having said this, one has to strive and arrive at a balance between risk that one should take and the returns that one should expect.

I would suggest to consider investing in equity funds / mutual funds. This would certainly give less returns as compared to investing directly in stocks but it would certainy give you MORE and SAFE returns as compared to savings account. I believe, this would balance your risk and reward ratio.

Other things that you can consider apart from Equity Mutual Funds is Corporate Bonds. They also give relatively better returns as compared to a saving account.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

Customer: replied 1 year ago.

Dear Rakhi,

Can you suggest any further strategies even if they are risky i want to assess my full range of options outside savings accounts? What about buying a property and renovating this and selling it at a higher rate?

Is there any savings accounts or bonds that might pay higher than the standard rate? Can you please provide some more options other than savings account, related to investments?

Yours sincerely,

John Fellows

Expert:  Rakhi Vasavada replied 1 year ago.
Dear *****,

Hello and welcome again. Thank you for your reply.

If you have funds enough to buy a property, it is certainly a good options. You can expect some decent appreciation in value over coming years. However, you need to know that if you are investing in property, you would be making is relatively illiquid as compared to assets which are equivalent to cash just as mutual funds and bonds.

So, if you are fine with this then buying a property is a good options.

Apart from savings account related options, I suggested you Equity Mutual Funds in my earlier reply. You will have the benefit of returns from stock market and also the benefit of safety as mutual funds are managed by professional managers. Apart from this, depending upon the amount that you have you can consider corporate bonds as well which offer relatively better returns as compared to savinds accounts.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

Customer: replied 1 year ago.

Dear Rakhi,

Why would you not suggest investing in Stocks for instance large companies that pay dividends every 6 months, which are generally more safe. If i spread my investments and take some risk is this generally okay?

My final question is outside the property market and investing in Equity Mutual Funds, is there any good investments you know of? What about premium bonds for instance, where you can win prizes every month for the amount you hold, is this a good option? Is there anything further that might be worth investing in?


Yours sincerely,


John Fellows

Expert:  Rakhi Vasavada replied 1 year ago.
Dear *****,

Hello and welcome again. Thanks for the reply.

The very specific reason that I did not ask you to invest in stocks is -- investing in stocks directly is a riskly affair especially if you are a novice or if you do not possess basic knowledge of analysing and picking up right stocks.

So, since I wanted you to invest in stocks, I suggested Equity Mutual Funds as this is ultimately investing in a stock market but indirectly through managed fund. This will slightly lower your returns but certainly add large quantum of safety to your investment.

If you are find with investing directly in the stocks, nothing better than that.

Premium bonds are fine, but the returns would be little lower as compared to corporate bonds and especially equity funds.

We cannot recommend any specific bond or a fund for you to invest being bound by the terms of service here at JA.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

Customer: replied 1 year ago.

Dear Rakhi,

If i did spread my investments and wanted some in a savings account, what is the best way of getting the highest possible savings rate? Do i need to lock the funds away for a long time or can i look online what would i search to find the best interest rate?



Yours sincerely,


John Fellows

Expert:  Rakhi Vasavada replied 1 year ago.
Dear *****,

Hello and welcome again....

The best way to look for interest rates is to look online. However, I do not think you will get any wide difference spreading more than 0.5% to 1% as such. However, you can certainly look online. It would be easier as well.

The following are few examples.


http://www.moneysupermarket.com/savings/


http://moneycompare.which.co.uk/savings-and-isas/instant-access-savings-accounts


I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

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